Assume that $1,200 is deposited in an account in which interest is compounded annually at a rate of 5%.Find the accumulated amount after 10 years rounded to the nearest cent.
A)$1,854.67
B)$1,954.67
C)$1,904.67
D)$2,054.67
E)$2,354.67

Question

Quizplus · Accepted Answer

The formula for compound interest is $A=P(1+r)^t$ where $A$ is the accumulated amount, $P$ is the principal, $r$ is the annual interest rate, and $t$ is the number of years. Substituting the given values we get $A=1200(1+0.05)^{10}=1954.67$. Rounding to the nearest cent, we get an accumulated amount of $\boxed{	extbf{(B)}\ 1954.67}$.

Assume That $1,200 Is Deposited in an Account in Which